A $$1,000$ par value bond was issued $25$ years ago at an $9$ percent coupon rate. It currently has $10$ years remaining to maturity. Interest

rates on similar debt obligations are now $12$ percent. $($Use a Financial calculator to arrive at the answers. Do not round intermediate

calculations. Round the final answers to $2$ decimal places.$)$

a$.$ Compute the current price of the bond using an assumption of semiannual payments.

Price of the bond

b$.$ If Mr$.$ Mitchell initially bought the bond at par value, what is his percentage loss $($or gain$)?($Input the amount as positive value.$)$

Percentage

J$|\%$

c$.$ Now assume Mrs$.$ Gordon buys the bond at its current market value and holds it to maturity, what will her percentage return be$?$

$($Input the amount as positive value.$)$

Percentage

d$.$ Although the same dollar amounts are involved in parts $b$ and $c,$ explain why the percentage gain is larger than the percentage

loss.

Investment is larger

Investment is smaller